Credit Rating- New

India Ratings Assigns Indo Borax & Chemicals’s Bank Loan Facilities ‘IND BBB+’/Stable Jul 23, 2026 | Indo borax & chemicals Limited | Specialty Chemicals India Ratings and Research (Ind-Ra) has rated Indo Borax & Chemicals Limited (IBCL) bank loan facilities as follows: Details of Instruments Instrument Regulator of Date of Coupon Maturity Size of Issue Rating Assigned with Rating Type Instrument Issuance Rate Date (INR million) Outlook/Watch Action Bank loan RBI - - - 600 IND BBB+/Stable/IND A2+ Assigned facilities Analytical Approach Ind-Ra has taken a standalone view of IBCL to assign the rating. Detailed Rationale of the Rating Action The rating reflects IBCL’s established position in the domestic boric acid industry, supported by its long operating track record, with around 50% market share in the steel/refractory segment, and adequate liquidity profile. The company’s revenue improved in FY26, driven by higher boric acid volumes, improved realisations, and increased contribution from disodium octaborate tetrahydrate (DOT). Despite an improvement in its blended realisations, IBCL’s EBITDA margins moderated in FY26, mainly due to higher raw material costs per tonne (t) and the impact of an unplanned shutdown of over 45 days in 3QFY26. Consequently, its EBITDA/t declined to around INR26,130/metric tonnes (MT). The management expects the margins to remain at 20%-22% over the medium term. The rating is constrained by IBCL’s moderate scale of operations, high dependence on boric acid, 100% import dependence for its key raw material, an inventory-driven working capital cycle, and promoter-level pledge risk. While IBCL had no debt outstanding at FYE26, it plans to avail a working capital facility of around INR600 million over the medium term. Furthermore, 100% of the promoter shareholding is pledged to secure Zenrock’s acquisition debt, comprising outstanding non-convertible debentures (NCD) principal worth around INR2,550 million and a bullet repayment due in FY31. As a result, promoter deleveraging and pledged shares remain key rating monitorables. List of Key Rating Drivers Strengths Strong business profile; forward integration efforts to further strengthen business profile Volume-led revenue growth in FY26; debottlenecking and planned capex to support future growth Credit metrics to remain healthy despite proposed debt funding over medium term Weaknesses Product/geographical concentration reflected in single product and 100% import dependence Moderation in EBITDA/t in FY26; likely to remain stable in FY27 Working capital intensive operations with higher raw material days; exposed to inventory losses 100% pledge of promoter shareholding remains key monitorable Detailed Description of Key Rating Drivers Strong Business Profile; Forward Integration Efforts to Further Strengthen Business Profile: IBCL has an established operating track record in boron-based chemicals, with operations dating back to 1980. The company set up its first boric acid plant in 1981 at Asangaon, Maharashtra, followed by a borax plant in 1983. It currently operates its key manufacturing facility at Pithampur, Madhya Pradesh. The company’s product portfolio primarily comprises boric acid — technical grade and Indian Pharmacopoeia (IP) grade— along with borax and DOT. Boric acid remains the major revenue contributor for IBCL and caters to end-user industries, such as steel, refractories, glass, ceramics, pharmaceuticals, personal care, agriculture and industrial chemicals. In the steel industry, IBCL’s boric acid is mainly used in ramming mass and refractory/furnace-lining applications, where it acts as a heat-activated bonding/fluxing input and supports the strength and heat resistance of furnace lining materials used in steel-melting operations. As per the management, IBCL has a market share of around 50% in the boric acid requirement for the steel/refractory segment, which supports its established customer base in the domestic market. The company also has a differentiated position in IP-grade boric acid, and its disclosures state that it is the sole manufacturer of IP-grade boric acid in India with a valid Food and Drug Administration licence. Additionally, IBCL was the first company in India to receive Bureau of Indian Standards (BIS) certification for manufacturing technical grade boric acid. IBCL is focusing on improving the utilisation of its existing boric acid capacity through de-bottlenecking, along with forward integration into value-added boron derivatives such as DOT, boron oxide and zinc borate. These initiatives are expected to support product diversification and improve its revenue mix over the medium term, although a meaningful scale-up will depend on market development, customer acceptance and sustainable demand for these value-added products. Volume-led Revenue Growth in FY26; Debottlenecking and Planned Capex to Support Future Growth: IBCL’s scale of operations remained moderate, with its revenue increasing to around INR2,155 million in FY26 (FY25: INR1,750 million), supported by higher boric acid volumes and improved product realisations. Boric acid sales volumes increased to around 15,365 MT in FY26 (FY25: 14,296 MT), while realisations improved to around INR127,749/MT (INR115,874/MT). The company also witnessed an increase in DOT volumes to around 983 MT in FY26 (FY25: 679 MT), supported by improved product acceptance and realisations. Consequently, blended realisations improved to around INR127,488/MT in FY26 (FY25: INR117,168/MT). Over the near term, the agency expects the revenue growth to be supported by ongoing de-bottlenecking initiatives at the existing boric acid capacity, through which the management intends to increase annual production to around 18,000 MT from around 14,000-15,000 MT, without undertaking any major capex. Furthermore, IBCL plans to increase the DOT production to around 1,500 MT, which should support incremental revenue growth. In addition, the company plans to undertake a capex of around INR900 million over FY27-FY28, which would be funded entirely through internal accruals. Of the total capex, around INR200 million has been earmarked for setting up a 4,000 MT boron oxide capacity, while the balance is proposed for establishing an additional 10,000 MT boric acid capacity. Commercial operations from the proposed facilities are expected to commence from FY29. Accordingly, meaningful growth beyond the de-bottlenecking phase is expected to be driven by the timely execution and ramp-up of the proposed capacities, along with the development of markets for boric acid and downstream products such as DOT, boron oxide and zinc borate. Ind- Ra expects marginal growth in blended realisation per tonne over the medium term, led by stable boric acid realisations and higher contribution from value-added products. Credit Metrics to Remain Healthy Despite Proposed Debt Funding Over Medium Term: IBCL’s credit metrics remained strong, supported by its debt-free balance sheet, healthy operating profitability and sizeable liquidity buffer. The company had no debt outstanding on its books at FYE26, resulting in nil leverage and strong coverage metrics, given the absence of finance cost and steady operating accruals. Despite the proposed working capital facility, Ind-Ra expects the company’s credit metrics to remain healthy, supported by its low leverage, adequate liquidity and internal accrual generation. However, any sizeable utilisation of the working capital facility, higher-than-expected capex, large dividend payout, an increase in its inventory requirements, or a weakening in its operating performance could weaken its liquidity cushion and will remain key rating monitorable. Product/Geographical Concentration Reflected in Single Product and 100% Import Dependence: IBCL’s business profile remains constrained by its high dependence on boric acid, which contributed a dominant share to the company’s revenue in FY26. While the company has initiated ef [Showing first 8,000 characters — download PDF for full document]